Payment technology developer MyPINPAD has upgraded its point-of-sale app to allow merchants to accept and authorize contactless payments through a consumer mobile device — and to potentially provide a less expensive option for PIN transactions for smaller merchants.
The London-based MyPINPAD worked with UL (Underwriters Laboratories) to establish PCI certification for the process, which it contends can bypass dedicated terminals or hardware-based card readers. MyPINPAD's SoftPOS supports chip-based payments using a Near Field Communication interface common in off-the-shelf smartphones and tablets.
Like all payment technology developers, MyPINPAD is leaning into COVID-19-fueled demand for less interaction with payment terminals and staff at retailers. It also positions its customer verification app as a way for merchants to develop a universal contactless solution through the tap-and-go of an NFC-enabled card to a mobile device containing the MyPINPAD app.
UL has experienced firsthand the difficulty in
"This is a different approach from the more traditional building of a terminal specifically for accepting cards," Andrew Jamieson, technology and security director at UL, said of the MyPINPAD certification. "This is taking a commercial off-the-shelf device and utilizing it for the purpose of PIN acceptance."
Most of the contactless antennae on the commercial devices would not meet normal EMV testing requirements, so there are different types of tests for the contactless kernel that have to be completed on these devices, Jamieson added.
MyPINPAD's certification also marks another advancement in established standards for PIN in the modern payments era.
PCI established standards for use of
PIN on glass addresses traditional payment terminals that began using touchscreen interfaces, while PIN on mobile refers to a newer generation of more versatile payment solutions, including the introduction of using consumer-off-the-shelf devices (COTS) as a payment terminal. However, MyPINPAD's recent certification brings the contactless element into play for the first time, eliminating the need in most cases for the consumer to even input a PIN for authorization.
Earlier this year technology company
"This is along the same realms as the MagicCube solution, but it is the first to go through the PCI process and get certification," said Jon Pinkerton, chief product and information officer at MyPINPAD. "We went through the same Visa and Mastercard process to support PIN entry on those devices as well."
In talking to its target clients MyPINPAD realized the importance of getting PCI certification so that its clients could offer the white-label service to merchants. Once licensed to use the MyPINPAD software, those clients would also be "future-proofed" regarding any further PCI requirements or upgrades of that standard, Pinkerton said.
Pinkerton believes acquirers will have a feature to offer merchant clients that would "introduce the capability for a small business person to have contactless payment acceptance for a very low price, making it a much better option rather than capital outlay for an expensive device."
With the pandemic foremost in the minds of many merchants and consumers, the timing is good for a contactless option via a smartphone, said Steve Mott, principal of BetterBuyDesign, a Stamford, Conn.-based consulting firm.
"For a merchant or consumer wanting to be more secure with PIN debit transactions, this now starts to open up some avenues for that," Mott said. "In a COVID world, some worry about touching a PIN pad with your finger at a terminal or ATM. Cash will never go away, but contactless will continue to grow as it makes economic sense for merchants to adopt it."
The technology also helps advance the argument that many independent networks have long pushed in that PIN is more secure and suffers fewer chargebacks, Mott added.
"What we don't know is whether smaller merchants have the interest, particularly right now, in touching a consumer," Mott said. "It is better to ask the consumer to go ahead and use PIN on their own phone."
As merchants begin to increase the types of customer authentication methods they can accept at the POS, it could equate to less need for the consumer to use the merchant keyboard to input a PIN. But it is important for providers to establish PIN acceptance on the back end of a merchant network as well, for those times when a PIN is presented, UL's Jamieson noted.
"It may sound a little strange to say about PIN usage, but in some markets like the U.K., Australia and New Zealand during the COVID crisis, they have increased the no-CVM limit and, in some cases, accepting contactless payments without authentication because EMV is already quite secure and they can do that," he added.
Earlier this year MyPINPAD received PCI certification for its
MyPINPAD's contactless software operates in both Android and iOS platforms.
